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Unit 1 Assignment 2

Zach Kaill

Introduction
This report aims to analyse the operational context of a chosen business entity, Nike, along with the
corresponding market it operates within
...

Nike, Inc
...
The company specialises in the
design, development, manufacturing, and global marketing and sales of a diverse range of products, including
footwear, apparel, equipment, accessories, and services
...

The success and recognition of Nike can be attributed to various factors, notably its distinctive "swoosh" logo
and the widely recognised slogan "Just Do It
...
Moreover, Nike has consistently
demonstrated its leadership in the sports apparel industry by offering an extensive array of products catering
to both professional athletes and everyday consumers
...

In addition to its core offerings, Nike has successfully diversified its business ventures by entering other
markets, such as golf and skateboarding
...
Overall, Nike's commitment to
innovation, quality, and brand recognition has propelled it to the forefront of the global market, making it a
highly influential corporation
...


External Factors

Nike, akin to other businesses, is subject to the influence of external factors that are beyond its jurisdiction
...
For
instance, a shift in the governing body could impede Nike's operations in specific nations, while technological
advancements could present novel avenues for Nike to promote its merchandise
...


Political

Nike engages in diverse markets worldwide, thereby making it susceptible to various political influences
...

1a
...
Countries with robust labour laws can safeguard the rights of workers and hold
companies accountable for any violations
...

The investigation into Nike's labour practices began in the late 1990s, when reports emerged of child labour
being used in the production of Nike products in Pakistan
...
In response, the company commissioned an
independent investigation into its labour practices, which was conducted by former UN Ambassador Andrew
Young
...
In particular, it was found that children as young as 10 were working in hazardous
conditions in Nike factories, often for long hours and low pay
...


Unit 1 Assignment 2

Zach Kaill

In response to these findings, Nike implemented a series of changes to its labour practices
...
Nike also established an independent monitoring system to ensure that
its suppliers were complying with the code of conduct, and began to work more closely with labour rights
groups and NGOs to improve conditions for workers
...
The company has implemented a range of initiatives to improve working
conditions and protect workers' rights, including the Better Cotton Initiative, which aims to promote
sustainable cotton production, and the Fair Labour Association, which works to improve labour conditions in
factories around the world
...
Political (In)stability
Emerging markets have posed a particular challenge for Nike in recent years, as the company has had to
navigate numerous political risks
...
This decision was a
response to the Trump Administration's imposition of tariffs on steel and aluminium imports from India
...

Moreover, Nike has also been adversely affected by the political instability in Venezuela
...
Additionally, the devaluation of the country's currency has significantly
diminished the value of Nike's sales in the South American nation
...
The government's strict regulations and
policies have made it difficult for foreign companies to operate smoothly in the country
...

Furthermore, political instability can disrupt Nike's supply chain
...
This disruption
to the supply chain led to a substantial rise in production costs, thereby negatively impacting the company's
financial performance
...
For instance, in countries like Brazil and Argentina, economic crises and currency fluctuations have
impacted consumer purchasing power, making Nike's products more expensive and less accessible to the local
population
...
Geopolitical
Nike, being a global brand, operates in various countries and regions, making it vulnerable to geopolitical
factors
...
This can result in a decline in sales and revenue for the company
...

Similarly, pandemics such as COVID-19 can have a significant impact on Nike's business operations
...
The pandemic also disrupted the global supply chain, leading to a shortage of
raw materials and finished products
...
For instance, the earthquake and tsunami that hit Japan in 2011 disrupted Nike's
supply chain, leading to a shortage of products in the market
...
Military coups, civil wars, and political unrest can disrupt production and result in a
decline in sales
...


Unit 1 Assignment 2

Zach Kaill

On the other hand, peace agreements can have a positive impact on Nike's business operations
...
For instance, the peace
agreement between Israel and the United Arab Emirates in 2020 opened up new markets for Nike, leading to
an increase in sales in the region
...


Environmental

Environmental regulations can exert a substantial influence on the financial performance of Nike, a prominent
player in the sportswear industry worldwide
...

One manner in which environmental regulations can impact Nike's financial performance is through the
mandatory adoption of eco-friendly materials
...

Consequently, this may lead to increased costs for the company, as eco-friendly materials may be more
expensive or necessitate alterations in manufacturing processes
...

Another way in which environmental regulations can influence Nike's financial performance is through the
imperative to reduce its carbon emissions
...
Given Nike's status as a global
enterprise with a complex supply chain, it may encounter challenges in meeting these targets
...
These investments can be financially burdensome and may impact Nike's overall
financial standing
...
Governments have become more stringent in
enforcing environmental regulations, and companies that fall short of compliance can face significant financial
repercussions
...

Nike's dedication to attaining carbon neutrality by 2050 has spurred the organisation to adopt various
environmental strategies that have had a significant influence on its operations
...
The company has made substantial
investments in renewable energy initiatives, including solar and wind farms, to supply power to its
manufacturing plants and administrative buildings
...

Nike has implemented a significant endeavour aimed at decreasing the utilisation of plastic packaging in its
merchandise
...
Nike has introduced inventive packaging alternatives, including the
incorporation of recycled materials and the development of packaging that can be easily recycled
...

In addition to its efforts in reducing plastic packaging, Nike has also prioritised the integration of recycled
materials into its products
...
This utilisation of
recycled materials has effectively reduced the demand for raw resources and minimised the environmental
consequences associated with the extraction and processing of raw materials
...
By embracing renewable energy sources, Nike has lessened its
dependence on non-renewable resources and decreased its greenhouse gas emissions
...

Moreover, these measures have also positively influenced Nike's brand image and reputation
...
Nike's environmental initiatives have positioned the
company as a frontrunner in sustainable practices within the sportswear industry, attracting environmentally
conscious consumers and bolstering its competitive advantage
...


Economic

Economic policies and trade restrictions between nations can have significant implications for Nike as a
business
...

For instance, if a trade deal is established between two nations that reduces tariffs and opens up new markets,
Nike stands to benefit from increased sales due to the expanded market size
...
Conversely, if a nation
imposes high tariffs on Nike's products, the company's profit margins could be adversely affected due to the
increased cost of production
...
If a nation's government enacts legislation that raises the minimum wage, Nike
may be compelled to pay higher wages to its employees, thereby reducing its profit margins
...

Furthermore, economic policies and trade restrictions can impact the competitive landscape in which Nike
operates
...
This could potentially
hinder the company's ability to compete effectively in the market
...

Additionally, the economic policies of nations have also affected Nike's supply chain and sourcing strategies
...

By taking advantage of lower labour costs and favourable trade agreements, Nike has been able to maintain
competitive pricing and maximise its profit margins
...

Furthermore, currency exchange rates play a crucial role in Nike's international operations
...
For example, a strengthening of the US dollar can increase the cost of importing raw
materials and manufacturing goods in countries with weaker currencies, affecting Nike's overall profitability
...
Governments may impose stricter labour standards or environmental regulations, which can
increase production costs for Nike
...
Compliance with these policies can be costly for Nike, but
it is also essential for maintaining its brand reputation and meeting consumer expectations
...
Initially, the tariffs resulted in an
increase in production costs for Nike, as a substantial portion of its footwear and apparel is manufactured in
China
...

The escalation in production costs directly influenced Nike's capacity to market its products competitively
within the United States
...
However, the potential increase in prices could
potentially diminish the appeal of Nike's products to price-sensitive consumers, consequently leading to a
decline in sales volume
...
The company had to
re-evaluate its manufacturing and sourcing strategies to mitigate the repercussions of the tariffs
...
This undertaking involved substantial investments in establishing new manufacturing
facilities and training new workers, thereby further contributing to the company's costs
...
The trade
tensions between the US and China created the potential for disruption in Nike's international operations
...

b
...
Several of these internal factors encompass Nike's
organisational structure, corporate culture, financial resources, marketing strategy, product innovation, and
social responsibility
...


Organisational Structure

The matrix structure implemented by Nike has played a crucial role in its ability to adapt to market changes
and continuously create innovative products
...

By breaking down traditional departmental silos and encouraging collaboration across functions, Nike has
been able to leverage the diverse skills and knowledge of its employees
...

The matrix structure has also facilitated a more efficient management of resources within Nike
...
This flexibility allows Nike to optimise resource allocation, ensuring that the right people with the
right skills are assigned to projects, and that resources are utilised effectively
...
By bringing together
individuals from different functions, the company has fostered a culture of collaboration and knowledge
sharing
...

In addition, the matrix structure has enabled Nike to introduce new products at a faster pace than ever before
...
This parallel processing allows Nike to streamline its
product development process, reducing time-to-market and enabling the company to stay ahead of
competitors
...
By introducing new lines of yogainspired apparel, Nike was able to capitalise on the expanding trend and maintain a competitive edge in the
market
...


Corporate Culture

Nike's corporate culture encourages employees to think outside the box and challenge traditional norms
...
Nike's emphasis
on creativity and imagination has led to the development of ground-breaking products that have
revolutionised the athletic industry
...
The company values
the input and ideas of all its employees, regardless of their position or department
...
By fostering a culture of
collaboration, Nike has been able to tap into the collective intelligence of its workforce, resulting in the
creation of products that resonate with consumers and meet their evolving needs
...
The company sets high
standards for itself and its employees, pushing them to constantly strive for excellence
...

Additionally, Nike's corporate culture promotes a sense of purpose and social responsibility
...
Nike has been at the
forefront of various social and environmental initiatives, such as, reducing its carbon footprint, and supporting
communities in need
...

However, Nike has been embroiled in controversy over its corporate culture for several years
...
These allegations have led to widespread criticism of the company's labour practices and
have tarnished its reputation
...
Many consumers have become more aware of the issues surrounding labour practices in the
fashion industry and are increasingly demanding that companies take responsibility for the conditions under
which their products are produced
...

3
...
The company's corporate social responsibility (CSR) endeavours have
encompassed a wide range of initiatives, from establishing recycling centres to implementing programs aimed
at empowering young women and girls
...
By utilising sustainable materials and promoting sustainable manufacturing processes, the company
actively works towards reducing the environmental footprint of its products
...
In addition to this, the company
has set a target to exclusively utilise 100 percent renewable energy in all of its owned or operated facilities by
2025
...
This program is designed to empower young women, enabling them to
become leaders within their communities and overcome the barriers that hinder their full potential
...

Nike's CSR efforts also extend to its supply chain, where the company has implemented various programs
aimed at improving working conditions and promoting fair labour practices
...

In addition to its own initiatives, Nike also collaborates with other organisations and stakeholders to drive
positive change
...
Nike also partners with organisations such as the United Nations Foundation and the World
Wildlife Fund to address global sustainability challenges
...


Competitive Environment

The business's competitive environment pertains to the setting of rivalry among companies within the same
industry
...
This competition can occur at different levels, including local, regional, national, and
international, and can encompass various strategies, tactics, and approaches
...

1
...
In order to stay competitive, Nike must carefully analyse the market
landscape, taking into consideration factors such as pricing, product design, and marketing strategies
employed by these rival brands
...
This compelled Nike to adapt their marketing
strategies to effectively differentiate their product and highlight its unique features
...
Setting prices too high may result in a loss of market share to rival brands, while pricing
products too low could negatively impact Nike's profit margins
...

Furthermore, Nike is also influenced by the product design and innovation of their competitors
...
As
an example, when Adidas introduced their Boost technology, Nike responded by introducing their own foam
technology, known as React
...
This includes
analysing their advertising campaigns, endorsements, and sponsorships
...
For instance, if Adidas is targeting a younger demographic through social media influencers, Nike may
adjust their marketing strategy to appeal to a different audience or find a unique way to engage with the same
demographic
...
As a global brand, Nike faces competition from companies like ASICS (Japan) and New Balance
(has become more popular in recent years), which have strong footholds in specific regions
...


Unit 1 Assignment 2
2
...
The company has set itself apart
from its competitors by prioritising the customer experience, incorporating cutting-edge product design, and
implementing innovative marketing campaigns
...

2a
...
They
understand that today's consumers expect more than just a transaction; they want a personalised and
engaging experience that caters to their individual preferences
...

One of the ways Nike achieves this is through their “Nike By You” website
...
Whether it's choosing
a specific colourway or adding personalised initials, customers have the freedom to create a unique product
that reflects their personal style
...

In addition to the Nike By You website, Nike offers a NikePlus membership program
...
By becoming a NikePlus member, customers can enjoy a
heightened level of engagement with the brand, gaining access to limited-edition products and unique
experiences that are, to the general public, unavailable
...

2b
...
The Nike Adapt BB, for instance, revolutionises the basketball shoe industry by introducing
self-lacing technology
...

In addition to incorporating cutting-edge technologies, Nike also places a strong emphasis on utilising novel
materials in its product design
...
These materials often offer
enhanced durability, flexibility, and breathability, ensuring that Nike products can withstand the rigorous
demands of athletic performance
...
These innovations have not only enhanced the
performance and comfort of Nike products but have also set the brand apart from its competitors
...
Marketing Campaigns
Nike's marketing strategies go beyond traditional advertising methods and aim to create a strong emotional
connection with consumers
...
This is evident in
Nike's iconic "Just Do It" slogan, which has become synonymous with the brand and encapsulates the
company's philosophy of encouraging individuals to take action and overcome obstacles
...
By partnering with high-profile athletes and influencers, Nike is able to
tap into their immense fan bases and leverage their influence to promote its products
...


Unit 1 Assignment 2

Zach Kaill

A recent example of Nike's successful celebrity collaboration is its partnership with American basketball player
LeBron James for the "More than an Athlete" campaign
...
Nike recognised the power of James' personal brand and his ability to inspire and motivate
people beyond the basketball court
...

3
...
By offering a range of products at different price points, Nike can appeal to a wider customer base
...

Nike Revolution 5 is an affordable option that caters to price-sensitive customers who still want to purchase
Nike products
...
This ensures that customers can
still enjoy the Nike experience without breaking the bank
...
These
items frequently integrate cutting-edge technologies and materials, ensuring unparalleled comfort, longevity,
and performance
...

By providing a variety of products at varying price ranges, Nike can expand its market share
...

Nike employs various strategies to make their products more accessible to customers, including tiered pricing
and promotional discounts
...
By offering reduced prices on select products during these periods, Nike
encourages customers to take advantage of the deals and make purchases
...
By providing discounts, Nike can enhance customer loyalty and boost sales
...

4
...
It is essential for businesses to remain competitive and profitable
...

Nike is a prime example of a company that has successfully implemented cost control measures
...
These measures have enabled Nike to stay competitive in the market
while reducing costs
...
In 2020, the company closed its
manufacturing facilities in Mexico and Vietnam (although facilities in the latter have since resumed
production) and shifted production to low-cost countries like China, Indonesia, and India
...

Nike has also outsourced its manufacturing operations to reduce costs and stay competitive
...


Unit 1 Assignment 2

Zach Kaill

Lastly, Nike has increased automation in its production process, which has reduced labour costs and increased
efficiency
...

These cost-cutting measures have enabled Nike to remain competitive and profitable
...
94 billion – a 122
...

5
...
As a result, Nike has become one of the
most trusted and esteemed brands worldwide
...

This recognition and reputation have significantly contributed to driving sales and revenue growth
...
1 million in 1976, Nike's sales have skyrocketed to over $50 billion in 2023
...
According to the American Customer Satisfaction
Index, Nike boasts the highest customer satisfaction score among all athletic apparel companies
...

Furthermore, Nike's reputation has enabled it to attract top talent
...
This has
allowed Nike to maintain its competitive edge and remain a frontrunner in the athletic apparel industry
...
By aligning itself with individuals who embody the brand's values and
resonate with its target audience, Nike has been able to leverage their influence and reach to further enhance
its reputation and connect with consumers on a deeper level
...
Through effective
marketing campaigns and a strong presence on social media, Nike has built a dedicated and loyal customer
base
...

Select a variety of techniques to undertake a situational analysis of a given organisation – P5
1
...

With a diverse portfolio of products, the
company offers a wide range of options to cater
to different customer needs
...

The company has consistently demonstrated
strong financial performance, reflecting its
ability to effectively manage its resources and
generate profits
...


Not widely established in certain geographical
locations
Potential infringements of labour regulations
and human rights
Allocation of resources towards technological
advancements and sustainable practice
Partnership with other brands and enterprises
Diversification of market reach
Emphasis on enhancing customer satisfaction
Competitors and counterfeiters engaging in
product copying pose a significant threat to
companies operating in the athletic apparel
industry
The athletic apparel industry is experiencing a
surge in competition, which poses challenges
for businesses operating within this sector
The rising costs of raw materials and labour
further contribute to the difficulties
encountered by businesses in this industry
Labor practices have the potential to generate
negative public opinion, adding to the
complexities faced by companies in the athletic
apparel industry

5C’s Analysis of Nike

The 5C's in the realm of business encompass a collection of elements that play a pivotal role in gauging the
triumph of any entrepreneurial endeavour
...

a
...
With a presence in more than 200 countries, they are among the most valuable brands worldwide
...
They have a significant presence in the sports industry
...
Customer
Nike focuses on catering to the athlete as their primary target customer
...
Additionally, Nike
also aims to capture the attention of everyday consumers who appreciate the brand and recognise its
commitment to quality
...
For instance, they have developed shoes with advanced
cushioning for runners and apparel with moisture-wicking fabric for athletes who engage in intense workouts
in hot weather conditions
...


Competitor

Adidas, Puma, and Under Armour are among the top competitors of Nike, all of which provide various
products and services for athletes
...

d
...

By working closely with professional athletes, Nike ensures that their offerings are specifically designed to

Unit 1 Assignment 2

Zach Kaill

meet their unique requirements
...
For instance, their collaboration with Apple resulted in the
creation of the Nike+ running app, showcasing their commitment to delivering cutting-edge solutions
...


Climate

Nike operates in a fiercely competitive landscape, where the industry is in a constant state of evolution
...
To
maintain its competitive edge, Nike must persistently strive to create products and services that cater to the
ever-changing demands of athletes and consumers
...


Porter’s Five Forces Model

The Porter's Five Forces Model is a structure utilised to evaluate the competitive landscape of an industry
...
This structure enables firms to comprehend the industry's
composition and the degree of competition in the market, and apply the knowledge to make strategic choices
...


Threat of New Entrants

Nike possesses a formidable brand reputation and benefits from substantial economies of scale in both
production and distribution of its merchandise
...
The substantial capital investments and expenses required to compete with
Nike on a global scale can serve as a significant deterrent for most aspiring entrants
...
Threat of Substitutes
Nike encounters rivalry from various sports and leisure apparel and footwear brands, including Adidas and
Puma, as well as from non-branded apparel and footwear companies like H&M and Zara
...

c
...

Nevertheless, Nike's production of goods is dependent on its suppliers, resulting in a moderate level of
bargaining power for the suppliers
...
Bargaining Power of Buyers
Nike's extensive customer base provides the company with a certain level of leverage
...

e
...
Nike encounters competition from a range of
competitors, including Adidas, Puma, H&M, and Zara, amongst others
...


Different Market Structures

Market structures encompass the diverse arrangements between buyers and sellers within a specific market
...

Notable market structures include perfect competition, monopolistic competition, oligopoly, and monopoly
...


Zach Kaill

Perfect Competition

The ideal market structure for perfect competition is one where many small firms produce and sell
indistinguishable products
...
There are no obstacles to entering or leaving this market, and all firms possess
complete knowledge of the market as well as their competitors' prices
...

b
...
This type of market is marked by some level of monopolistic
competition and/or market power, which can be wielded by either the suppliers or buyers
...


Monopolistic Competition

Monopolistic competition is a market arrangement in which numerous firms offer products that are distinct
from one another (i
...
, the products are similar but not identical substitutes) and firms possess some influence
over the pricing of their products
...
The key
features of monopolistic competition include a significant number of firms, differentiated products, the
freedom to enter and exit the market, and relatively low obstacles to entry
...
Oligopoly
An oligopoly is a market structure where a small number of firms hold a dominant position in the market,
giving them considerable control over the prices of their goods or services
...
Oligopoly markets are typically fiercely competitive and have significant barriers to entry, making it
challenging for new companies to enter the market
...


Monopoly

A monopoly market structure refers to a market structure in which a single supplier dominates the provision of
a particular good or service
...
Monopoly markets typically arise due to technological progress,
exclusive rights granted by the government, or the existence of natural monopolies
...


Competition and Profitability

Competition among businesses can exert a significant impact on their profitability
...

Consequently, this can lead to a decline in their profits, as they earn less revenue for each unit of goods or
services provided
...
This, too, can diminish profitability, as they incur higher
expenses to attract customers
...
In order to remain competitive, businesses may be required to invest in new
technologies or processes
...

Lastly, the entry of new businesses into the market can also impact profitability
...
Consequently, this will lead
to a reduction in their profits
...


Relationship between demand, supply, and price

Unit 1 Assignment 2

Zach Kaill

Nike’s business model relies on the interconnectedness of demand, supply, and price to maximise profits
...
In the case of Nike, the brand's products have garnered a strong demand due to their reputation for
quality, style, and performance-enhancement
...
Nike meticulously
manages its production and inventory levels to ensure that supply meets demand
...

The relationship between demand and supply directly impacts the price of a product
...
Nike recognises this
dynamic and strives to maintain attractive prices for consumers while still generating profits
...
The combination
of high demand and limited supply led to a surge in prices
...

4
...
The company's pricing approach is influenced by several factors, such as the
superior quality of its products, the production costs, the target audience, and the competitive market
dynamics
...
In 2019 alone, Nike's sales soared to an impressive $39
...
This remarkable growth can be attributed to Nike's unwavering
commitment to delivering top-notch quality and its adeptness in setting the right prices for its products
...


Quality

Nike has deliberately chosen to prioritise quality over pricing
...
This
approach has been highly effective, as numerous customers are willing to pay premium rates for merchandise
that guarantees superior quality
...
Cost of Production
Nike takes into account the cost of production as a crucial element in determining the price of its products
...
By setting the right price, Nike can maintain its
profitability even when production costs rise
...


Consumer Demographic

Nike's pricing strategy is aimed at a particular consumer group
...
By doing so, Nike attracts its target audience
while discouraging those who seek cheaper alternatives
...
Competitive Market Landscape
Nike considers the competitive market environment while formulating pricing strategies
...

This approach enables Nike to maintain its competitiveness in the market and effectively lure customers away
from its rivals
...


Competition

Unit 1 Assignment 2

Zach Kaill

Nike's success is heavily influenced by the competitive landscape it operates in
...
Nike
held a substantial market share of 27
...
4 percent in the same year
...

2
...
For instance, during a recession or
economic downturn, consumer spending tends to decrease, resulting in a decline in demand for Nike products
...
The year 2020
witnessed a substantial impact on Nike’s sales and revenue due to the global economic downturn caused by
the COVID-19 pandemic
...


Governmental Regulations

Nike is obligated to comply with government regulations that have an influence on its business activities
...

Furthermore, Nike faced the repercussions of the Sino-American trade war in 2018, which resulted in elevated
tariffs and amplified expenses for the company
...


Socio-Cultural Factors

Social and cultural influences can also have an impact on Nike's operations
...
This campaign received both commendation and criticism from consumers,
ultimately resulting in an unfavourable effect on Nike's brand reputation
...
This was due to the
design and marketing genius of co-founder Phil Knight, who pioneered the use of celebrity endorsements and
pioneering product design to capture the attention of the public
...

In the late 80s and early 90s, Nike’s focus shifted to the growing trend of “athleisure”, and the company saw
tremendous success with its apparel and accessories lines
...
This strategy led to the introduction of
iconic apparel pieces such as the Nike Air Jordan sneakers and the Nike Air Max collection
...
The company launched its own online store in 1999 and was one of the first companies to use
targeted advertising and data collection to personalise its customer experience
...

In recent years, Nike has continued to reinvent itself to stay ahead of the competition
...
The company has also made
efforts to improve sustainability by reducing waste and using more eco-friendly materials in its products
...


COVID-19

Nike implemented various measures to safeguard its employees, customers, and communities in response to
the COVID-19 pandemic
...
Additionally, Nike allowed its
employees to work from home and provided them with the necessary tools and resources to do so
...
The campaign offers workouts, advice, and other resources to help athletes remain motivated and
healthy
...

Furthermore, Nike donated $30 million to support COVID-19 relief efforts, including $1 million to the WHO’s
COVID-19 Solidarity Response Fund and $5 million to organisations helping vulnerable communities
...

Nike’s response to the pandemic has been widely praised, with the company reporting a total of $37
...
The company’s stock price also rose over 50 percent during the pandemic
...
Various factors within this environment can significantly impact
Nike's operations, sales, and brand reputation
...

Changes in consumer tastes, preferences, and purchasing power can have a direct impact on Nike's sales
...

The regulatory environment is another critical factor that influences Nike's business
...
For example, increased labour regulations in manufacturing countries can lead to
higher production costs for Nike
...

Technological advancements also play a significant role in shaping Nike's business environment
...
Nike has responded to these advancements by focusing on its online sales channels and
enhancing its social media presence
...

A real-life example that highlights the impact of external shocks on Nike is the COVID-19 pandemic
...
This event demonstrates Nike's vulnerability to external shocks and emphasises the need for
adaptability in the face of unforeseen challenges
...


Price Elasticity

Price elasticity refers to the degree of responsiveness exhibited by the quantity demanded of a product or
service in relation to changes in its price
...
If the quantity demanded changes more
significantly than the price, the price elasticity will be greater than 1, indicating an elastic demand
...

Nike has successfully utilised price elasticity as a strategic tool to outperform its competitors through its
aggressive pricing strategies
...
By recognising that customers were willing to pay a
premium for the brand name and product quality, Nike effectively capitalised on this opportunity
...
This approach has
not only attracted more customers but also stimulated demand for its products
...

The positive impact of Nike's price elasticity on its business is evident in the statistics
...
65 percent in 2022 compared to the previous year
...

Moreover, Nike has effectively harnessed price elasticity in the digital era
...
Through online
discounts and promotional deals, Nike has successfully stimulated demand for its products while maintaining
its esteemed brand image
...

Introducing fresh product lines or designs to cater to varied customer segments
...

To distinguish themselves from competitors, Nike may enhance the quality and/or quantity of their
offerings
...

Crafting inventive marketing campaigns to enthral customers and amplify sales performance
...


Supply & Demand

•
•

The economic model of supply and demand explains how the supply of a product or service interacts with the
demand for it
...
Supply
refers to the amount of a product or service that producers are willing to sell at a particular price, while
demand refers to the quantity that consumers are willing to purchase at a specific price
...

Nike has implemented various strategies to address the influence of supply and demand on its business
operations
...
This commitment is evident through its investments in research and development, ensuring
that its offerings remain up-to-date and aligned with evolving consumer needs
...
Lastly, the company has focused on enhancing the efficiency and cost-effectiveness of its supply
chain by embracing automation and technology in its manufacturing processes
...
In 2015, Nike introduced a production facility in Indonesia, designed to have a production
capacity of ten million pairs of shoes annually
...
Consequently, Nike has been able to meet the
growing global demand for its products by significantly increasing its production capacity
...
As per a report by Statista, Nike’s brand was valued at $33
...
These figures
underscore Nike's advantageous position to capitalise on the strong demand for its products
...
By investing in automation and technology, the company has effectively reduced labour expenses
while maintaining the production of top-notch products
...

In terms of future endeavours to tackle issues with supply and demand, Nike may:
•
•
•
•
•
•
•

3
...

Employ predictive analytics to gain valuable insights into demand patterns and effectively plan for
future production needs
...

Utilise technology to optimise the manufacturing process and decrease production expenses
...

Strengthen partnerships with suppliers to ensure the prompt delivery of raw materials
...

Globalisation

Globalisation refers to the progressive development of interdependence, interconnectedness, and integration
among various nations and cultures worldwide
...
The effects of globalisation have been profound,
influencing the economies, politics, cultures, and societies of numerous nations
...
By
establishing a vast network of suppliers and manufacturers across the globe, Nike has effectively globalised its
supply chain
...
As per Nike's 2018
annual report, the company sources its products from 124 footwear factories situated in 13 countries
...

The impact of globalisation on Nike extends beyond production and sourcing, significantly influencing its
marketing and sales endeavours
...
Furthermore, Nike has strategically established stores in various countries, facilitating
convenient access for customers to purchase its products
...
This
expansive global reach has not only allowed Nike to tap into new markets but has also facilitated the
expansion of its customer base
...
As emerging markets witness a rise in income levels, the demand for Nike's offerings has
experienced substantial growth
...
This surge in demand has not only bolstered Nike's profits but has also
enabled the company to further expand its market share
...


Enhance the level of transparency within their supply chain to guarantee that workers are being
remunerated fairly and provided with appropriate working conditions
...

Make effective use of technology to streamline processes and minimise unnecessary resource
utilisation
...

Market Failures

Nike has encountered several significant market failures that have impacted its business
...
In the early 1980s, Nike held a
dominant position in the United States athletic shoe market, controlling approximately half of it
...
By this point, their market share had shrunk to approximately 30 percent
...
The company had a historical
focus on producing expensive, high-end footwear, which resulted in unexploited opportunities to generate
revenue from entry-level and mid-level customers
...

Furthermore, government involvement played a significant role in Nike's market failures
...

Consequently, this impacted the company's sales as higher prices made its products less appealing to potential
customers
...
Firstly, the company has invested
heavily in marketing initiatives targeting entry-level and mid-level customers, enabling it to capture a larger
market share
...
Lastly, the company has actively engaged in lobbying
efforts with the American government to reduce or eliminate tariffs on imported footwear, aiming to mitigate
the negative impact of government intervention on its business
...
The company achieved
notable financial success in 2023, with reported revenues reaching an all-time high of $51
...
6 percent growth compared to the previous year
...

Implement further educational initiatives and programs that aim to empower customers with
comprehensive insights into market failures and equip them with the skills to effectively address and
overcome these issues
...
I have thoroughly scrutinised and assessed Nike's accomplishments and setbacks as a corporation,
analysed their reactions to market changes, and anticipated potential future initiatives the company may
undertake in response to possible external challenges
...
studocu
...
com)
NIKE, Inc
...
- Wikipedia
TED Case Study: NIKE: Nike Shoes and Child Labor in Pakistan (cornell
...

Nike - Reducing Our Carbon Footprint — NIKE, Inc
...

Nike Partners with WWF and Center for Energy & Climate Solutions to Reduce Greenhouse Gas Emissions Business & Human Rights Resource Centre (business-humanrights
...
Nike UK
Nike Vaporfly Shoes
...
com)
Nike By You Custom Shoes
...
Nike UK
LeBron James
...
Nike UK
Nike Zoom Pegasus Turbo 2 Men's Running Shoes
...
com

Unit 1 Assignment 2

Zach Kaill

Nike Black Friday 2023
...
Nike UK
Nike Cyber Monday 2023
...
Nike UK
Nike Sustainability - Interactive Map (nikeinc
...
org)
Chart: The Rise of the Swoosh | Statista
Nike Air Max 90 "Hot Habanero" Release | Hypebeast
Tribute to an icon: Nike Air Max 90 (campaignlive
...
uk)
A Brief History of Nike Air Cushioning: Read About it Here (highsnobiety
...
com revenue | ECDB
...
com)
Nike: Dream Crazy | Wieden+Kennedy (wk
...

Nike's revenue falls by 38% in the last quarter (worldfootwear
...
com)
What to know about the Nike Community Impact Fund — NIKE, Inc
...
statista
...
com/uk/adidas-shoes-statistics
https://www
...
com/story/nike-and-other-us-stocks-threatened-by-a-border-tax-goldman-says2017-01-24
https://fdra
...
statista
...
q4cdn
...
pdf#
https://scholarworks
...
edu/cgi/viewcontent
...

Nike and Adidas to Trump: New tariffs would be 'catastrophic' | CNN Business
Nike, Adidas sign letter to Trump urging against tariffs on footwear (cnbc

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